Many of you have the opportunity to change your lifestyle, and start building momentum towards your financial goals just by making changes to your income/expenses. I am not talking about getting a second job, or even starting a business. I talk a lot about ways to create income streams, but what about increasing cash flow? Creating income can be a daunting task, that requires investment risk of one’s resources, and increasing cash flow requires discipline. Tuning your income streams and cash flow to the right frequency can make all the difference in receiving a clear signal to reaching your financial/lifestyle goals. Too much adjustment of one over the other can lead to that signal becoming fuzzy or distorted.

A Return on Investment It is common knowledge that income is money earned either residually or through capital gains. The best way to differentiate income from cash flow is to ask whether or not an investment took place. What I mean by this is that income is the act of creating “new money”. In order to create new money, an investment must take place somewhere along the timeline of its manifestation. All income is a product of investing one or more of the six resources for exchange: 1. Capital 2. Ideas 3. Objects 4. Labor 5. Services 6. RelationshipsA Dollar Saved is a Dollar Earned Cash flow is the money that makes it into your bank account or pocket. The cash flow is also all the steps it took for that money to make it into your bank account or pocket. It is the paper trail that tells a tale of the journey it took since it’s manifestation as new money from your income stream. Cash flow is increased (not created) through proper planning and sustained by discipline. Say for example you changed your cell phone plan, and that saved you forty dollars a month. You may say to yourself, what’s the big deal? You didn’t just save forty dollars you saved yourself from investing more resources, because a dollar saved is a dollar earned. Hold up a dollar bill, whether that dollar is a product of an investment or thanks to discipline in spending, it still holds the same value in trade. The questions you need to consider is, how many resources can you invest to create new money, and how much discipline must you exercise to optimize cash flow, in order to reach your financial/lifestyle goals?Tune In to Your Station for Success Finding the right frequency between creating income streams and increasing cash flow makes all the difference in receiving a clear signal of your station for success in reaching your financial/lifestyle goals. Imagine your income streams represent a tuner dial, and your cash flow represents an antenna. Now in order for you to achieve your personal financial/lifestyle goals then you must tune into your station for success. Use your tuner dial (income streams) to find a channel that best suits your financial/lifestyle goals. Use your antenna (cash flow) to keep you pointed in the right direction, so you’re receiving the strongest signal that you are tuned in to your success station and are working towards reaching your financial/lifestyle goals.

You can download a free cash flow calculator on the Live Free Live Rich Club page.